The Energía Costa Azul (ECA) natural gas export project in Mexico’s Baja California has yet to receive an export approval from the Mexican government despite a new push to support the exports but sanctioning could happen later this year, Infraestructura Energética Nova (IEnova) executives said last Thursday.

ECA map

The proposed two-phase liquefied natural gas (LNG) project, a joint venture between San Diego-based Sempra Energy subsidiaries IEnova and Sempra LNG, would be built adjacent to the company’s existing ECA LNG receipt terminal near Ensenada. The target market for exports of imported U.S. gas would be East Asia. Planned investment is $1.9 billion.

“Our plan is to take a final investment decision by the end of the year,” CEO Tania Ortiz said. “So basically, we have a couple of months to go. So you should be hearing from us shortly.”

The news comes weeks after Mexico included a separate LNG project further down the Pacific Coast in a list of projects as part of a new public-private infrastructure plan aimed at jumpstarting economic activity. The Salina Cruz LNG project in Oaxaca state would be spearheaded by Mexico’s Comision Federal de Electricidad (CFE), which holds the majority of the country’s natural gas pipeline capacity.

Ortiz did not rule out working with CFE on export projects. There is “natural gas pipeline capacity that has not been fully utilized,” she said, adding that there are different ways in which that pipeline capacity could be optimized. 


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“They can do that by either simply releasing that capacity for industrial users to pay that capacity,” but “another solution, obviously, would be to develop additional liquefaction facilities to export gas. And like I said, we have a strong and constructive relationship and we would be interested in pursuing those types of initiatives together with CFE. We’re always looking at ways exactly of helping CFE optimize their capacity.”

The ECA LNG project includes a $400 million pipeline on the Mexico side of the border.

In a potential third LNG project on the Pacific Coast, Mexico Pacific Ltd. LLC expects sanctioning in 12-18 months on a liquefaction plant in Puerto Libertad, Sonora.

In a recent conference, MPL CCO Sarah Bairstow said Mexico offers better economic and regulatory conditions than the U.S. Gulf Coast. The economics of U.S. Gulf Coast projects “just aren’t as strong and don’t make as much sense as Mexican projects,” she said. “Mexico could not be in a better position from an economic fundamentals and supply perspective to really feed into that opportunity.”

In August, President Andrés Manuel López Obrador mentioned Topolobampo as a potential additional site for export projects. The president said sending U.S. gas out of LNG plants in Mexico made sense because Texan gas is “the cheapest in the world.”

Guaymas-El Oro

IEnova’s 510 MMcf/d Guaymas-El Oro pipeline remains in force majeure as conflicts with Yaqui indigenous communities continue.

Executives said López Obrador visited the Yaqui community twice in recent months and has expressed the importance of restarting the pipeline. IEnova has signed an extension of six months with anchor customer CFE over the delay.

IEnova reported profit of $146 million (10 cents/share) in the first quarter, compared with $110 million (7 cents) in the same period of 2019.